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The Importance of Abutting Land Searches in the Land Titles System

There are two systems of land registration in Ontario, Land Titles and Land Registry. Historically, land in Ontario was registered only under the Land Registry System pursuant to the Registry Act. In this System all land registration documents are submitted to the Land Registrar and are recorded, in the order they are submitted, on the abstract for the geographic area they affect within a Land Registry Office (“LRO”). Under this System, the documents are registered on title, but the provincial government does not guarantee the effect of such documents or title to properties. Consequently, in under to satisfy oneself of title under the Registry System, land registration documents must be searched 40 years into the past in order to assess the validity of title.

In the Land Titles System the provincial government has the responsibility for the validity and security of all instruments registered on title. The vast majority of land in Ontario has been converted to the Land Titles Automated System. Title registered and certified under the Land Titles System is guaranteed by the provincial government, and the record is updated each time a land registration document is registered.

Following a recent trend of case law, it has become clear that despite the fact that the provincial government guarantees title of land registered under the Land Titles System, land owners may still be held responsible for administrative errors where said errors were reasonably discoverable. This highlights the importance of undertaking abutting land searches and title searches, regardless of the acquisition of title insurance. This raises the questions as to whether title can ever really be absolute.

In 923424 Ontario Limited v 1695850 Ontario Inc.Justice Perell found that a landowner cannot rely on the lack of express notice of a right of way on servient land to extinguish the right of way. In this case the existence of a right of way was registered on the abstract of the dominant property, but was absent from the abstract of the servient property. The servient landowner in these circumstances argued that as a result of the failure to register the right of way following conversion of the property from the Land Registry System to the Land Titles System, the right of way was extinguished.

All parcel abstracts for land expressly stipulate that the abstracts are subject to paragraph 2 of section 44 (1) of the Land Titles Act, which provides that unless the contrary is expressed on the register, the registered land is subject to certain liabilities including easements. This section serves as notice that the land may be subject to a right of way. The court found that despite lack of express notice of the right of way registered on the servient property, the landowner had implied notice through the section 44 statement found on the parcel abstract. As such, had the landowner heeded the section 44 instructions and undertaken an abutting land search, the right of way would have been discovered and costly litigation could have been avoided.

The Takeaway

This case reinforces the importance of abutting land searches when undertaking a title search prior to property acquisition. While many title defects may be protected by title insurance, it remains necessary to complete all title searches to protect against unlikely errors and obtain clear title.